Should Value Investors Buy These Finance Stocks?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Capital Bancorp (CBNK) is a stock many investors are watching right now. CBNK is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 9.16, which compares to its industry's average of 11.89. Over the last 12 months, CBNK's Forward P/E has been as high as 13.32 and as low as 8.81, with a median of 10.66.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CBNK has a P/S ratio of 1.86. This compares to its industry's average P/S of 2.92.
Finally, investors will want to recognize that CBNK has a P/CF ratio of 8.46. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 14.61. Over the past year, CBNK's P/CF has been as high as 10.10 and as low as 6.95, with a median of 8.58.
Investors could also keep in mind Salisbury Bancorp (SAL), an Banks - Northeast stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Salisbury Bancorp sports a P/B ratio of 1.21 as well; this compares to its industry's price-to-book ratio of 1.80. In the past 52 weeks, SAL's P/B has been as high as 1.28, as low as 0.92, with a median of 1.09.
These are just a handful of the figures considered in Capital Bancorp and Salisbury Bancorp's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CBNK and SAL is an impressive value stock right now.
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Capital Bancorp, Inc. (CBNK) : Free Stock Analysis Report
Salisbury Bancorp, Inc. (SAL) : Free Stock Analysis Report
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